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OI Technical Staff : 11/17/2005 9:59:59 PM

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Jeff Bailey : 11/17/2005 8:06:05 PM

ICE $35.25 -10.19% ... recap. This was a trade I felt was "best on the stock trader's board" today. I really did. I felt I did everything in my power to outline the trade ahead of time, the stock even traded as if BOT history might repeat.

Several traders, me included, have questions regarding "why" ICE didn't perform as a bull had planned. Again, two days of trade is nearly impossible to draw any conclusions.

Is ICE's "poor performance" related to a cooling-off for energy's run?

While there is some general (remember 2-days of trade for ICE) look to ICE and December Crude Oil (cl05z), here's an intra-day comparison chart of cl05z and ICE Link

Again, I don't think a trader of Crude Oil and/or ICE should draw an immediate conclusion (ie ICE up = oil up, oil down = ICE down).

Yes! Very similar "trend" intra-day and DAILY Pivot level action. This computerized action does suggest a tie though.

If cl05z were a stock and it had some really "good/bullish news" yesterday, what do you think of today's follow through action? I pose the question what do YOU think about yesterday's EIA data showing a decline in crude oil inventory after 5 weeks of a build? I was more surprised that CNBC was reporting traders were surprised by the draw on crude inventories. At least from the perspective that refining capacity was just starting to get back to Katrina levels. Shouldn't refiners that have been offline, create some DEMAND for oil to refine products? Maybe the size of the draw was more than expected, but today's trade in Crude Oil sure didn't have much follow through.

There's a lot of chatter that oil is being heavily shorted. Maybe so, but shorts don't look half as eager to cover as... well, as QQQQ shorts. Do they?

Was today's Nat Gas inventory data the "cause" for oil's weakness and ICE's? Nat. Gas was released at 10:30 AM EST. It doesn't appear to me that oil buyers were trying to front-run anything, and "build" on yesterday's surprise, only to give up on the Nat. Gas numbers.

Jeff Bailey : 11/17/2005 5:23:47 PM

Closing U.S. Market Watch found at this Link

Linda Piazza : 11/17/2005 5:06:33 PM

Here's a VIX chart that I've been studying this afternoon. Link

Jeff Bailey : 11/17/2005 5:07:04 PM

Closing Internals found at this Link ... Volumes at both exchanges were brisk, but not overly heavy considering monthly expiration. More tomorrow for stocks and trackers.

Jeff Bailey : 11/17/2005 6:04:10 PM

Current OPEN MM Profiles found at this Link ... Today's Activity ... Swing traded long 1/3 bullish position in shares of IntercontinentalExchange (ICE) at $40.00, then stopped at $37.05. ($-2.95, -7.38%)

Received a dose of "Max Pain" and closed out/bought back the covered WLP Nov. $75 Calls (WLP-KO) at $2.50 ($-1.60, or -177.78%).

I see stocks pinned under/at heavy open interest, and I see stocks being ripped above open interest. The WLP really gets to me today. All the prior gains from covered call selling are gone in a 24-hour period. We've profited from "Max Pain," but this one got me. I won't go back for seconds. Yes, at $77.50 a trader is thinking "that's smack between $75.00 and $80.00, do I confess my pain and close out, or hope for the pullback with one day left?"

It is brutal to be on the "wrong side of the trade." Similar to having your arm twisted, almost to what surely is the breaking point. At some point you have to call "Uncle."

Jane Fox : 11/17/2005 4:15:45 PM

ITs been awhile since the bulls have this site. Link

Jeff Bailey : 11/17/2005 4:05:11 PM

Hewlett Packard (HPQ) $28.99 +2.58% ... higher at $29.50 on headline numbers Link

Jeff Bailey : 11/17/2005 4:02:39 PM

Sell Program Premium ... DIA $107.30, SPY $124.50

Linda Piazza : 11/17/2005 3:58:26 PM

The TRAN has come within a couple of points of its 11/14 high. Remember, though, this morning when I said that since the new potential H&S on its 60-minute chart had a rising neckline that the TRAN could probably rise up into an equal-high test and not negate that H&S? Link

Jeff Bailey : 11/17/2005 3:58:02 PM

QQQQ Options Chain most active on top, Nov/December at/near the money on bottom at this Link

Linda Piazza : 11/17/2005 3:49:18 PM

TRAN getting very close to that 11/14 high.

Jeff Bailey : 11/17/2005 3:48:27 PM

QQQQ $41.24 +1.15% ... gets the trade at MONTHLY R2. Should go WEEKLY R2 tomorrow.

Linda Piazza : 11/17/2005 3:46:42 PM

The OEX is back at 60-minute Keltner resistance, at 570.97 on 60-minute closes. I don't think this is going to have too much relevance going into the close today, however, as everything is just being run up, and shorts are definitely running scared.

Jonathan Levinson : 11/17/2005 3:45:43 PM

Session highs across the board, volume breadth up to +4.1:1 on the NYSE, +3.3:1 on the Nasdaq.

Jeff Bailey : 11/17/2005 3:44:26 PM

VXN.X 13.28 -4.87% ... just under my QCharts' WEEKLY S1 13.30.

Linda Piazza : 11/17/2005 3:42:10 PM

TRAN's 11/14 high was 4080.95 (although the daily chart gives a different figure. TRAN at 4073.08.

Linda Piazza : 11/17/2005 3:40:29 PM

Time for market-on-close orders.

Jonathan Levinson : 11/17/2005 3:39:40 PM

Volume's falling off as QQQQ edges sideways off the high. Just like nearly all the pullbacks off the new highs, this one looks like a sideways bull flag. Link

Linda Piazza : 11/17/2005 3:38:53 PM

TRAN at a new high of the day again, seemingly running up to test that record high.

Linda Piazza : 11/17/2005 3:38:26 PM

Advdec line again attempting to bounce from that same Keltner line.

Linda Piazza : 11/17/2005 3:33:10 PM

We'll soon be getting market-on-close orders, in about ten minutes. I think you need to be making your end-of-day decisions soon, perhaps before those market-on-close orders hit. It's obvious that there's an underlying bid to the markets and the advdec line has not yet today failed to bounce from that line that's been supporting it. Tomorrow, SPX options for November will have expired and, although there's still often a pin-them-to-the-numbers effect on opex Friday, you can't count on that happening. Make up your mind soon if you have enough profits. If so, start tightening your stops underneath your long positions and let the market taken you out on any pullback, if any should occur.

The advdec line is now retesting that line that's been supporting it.

Jonathan Levinson : 11/17/2005 3:31:12 PM

QQQQ broke upper channel support, more red paintbars suggesting an overdone pop. It's a short signal, but with the intraday indicators now rising and another day's worth of sellers now underwater, I'm not going to step in front of it: Link

Jeff Bailey : 11/17/2005 3:30:10 PM

QQQQ $41.20 +1.05% ... sets its eye on MONTHLY R2. Weekly R2 then ahead at $41.52.

Keep an eye on that option chain!

Jonathan ... you see anything suspicious today?

Linda Piazza : 11/17/2005 3:29:33 PM

The OEX inches above the previous high of the day.

Jonathan Levinson : 11/17/2005 3:27:34 PM

Jon, if you have a chance take a look at BMHC. This is a OIN play from a week ago, that got stopped out when TOLL warned. My charting is not the best, but candlesticks look bullish to me. Stock traded up to 92, then crashed on the homebuilders warning.

The daily chart Link has a potential head and shoulders chart set up above an either horizontal or sloping neckline where indicated on the chart. Today's bounce from the sloping support line looks good, but runs counter to the ongoing daily cycle downphase. IF the bounce sticks, and holds above 75, there's the potential for an early abort to that downphase- bullish- but the safer trade would be from the 68 area testing rising and horizontal support. From 68, it will be possible to use a tighter stop just below that intersecting support.

Jeff Bailey : 11/17/2005 3:26:44 PM

03:00 Internals found at this Link

Linda Piazza : 11/17/2005 3:23:15 PM

BIX at a new HOD, about to test 359.23 resistance, with the BIX at 358.92 as I type.

Linda Piazza : 11/17/2005 3:22:37 PM

RLX at a new high of the day, with next resistance in the 463.25-464 zone, with the RLX currently at 462.31.

Linda Piazza : 11/17/2005 3:21:11 PM

TRAN at a new HOD.

Linda Piazza : 11/17/2005 3:19:57 PM

OEX back to that double top. I'm making these comments, but as I said earlier, the only thing to do today is for bulls to keep following the OEX higher with their stops. The advdec line keeps bouncing from that same support that has supported it all day, now at 2856 with the advdec line at 3020, and, until and unless that changes, at the very least, we're not going to get any downside, no matter how many bearish divergences set up on how many indices or indicators.

Jonathan Levinson : 11/17/2005 3:18:32 PM

Volume breadth +3.55:1 on the NYSE, +3:1 on the Nasdaq.

Jonathan Levinson : 11/17/2005 3:16:46 PM

QQQQ to a new high at 41.14 here, breaking previous resistance and pulling the channels higher: Link

Linda Piazza : 11/17/2005 3:15:29 PM

New high of the day for the RLX.

Linda Piazza : 11/17/2005 3:13:46 PM

Advdec line bouncing again from that support that's held it all day. TRAN bouncing again from the neckline of the confirmed H&S from earlier this week, now perhaps the neckline for an inverse H&S, although it just doesn't look as valid, being a continuation-form one.

Jeff Bailey : 11/17/2005 3:13:27 PM

AMR $17.68 +6.18% ... yes Bob, this is incredible. Might also have something to say about energy prices?

Jeff Bailey : 11/17/2005 3:11:23 PM

03:00 Market Watch found at this Link

Jane Fox : 11/17/2005 3:10:13 PM

This is the kind of day where it is wise to not think short even if you see a short setup. I have seen this kind of day many many times before and have seen shorts get their fingers sliced. Link

Jonathan Levinson : 11/17/2005 3:09:36 PM

QQQQ trading the high end of this afternoon's range but holding below this morning's resistance. A wavelet upphase is half done, while the 30/60 min cycles trade sideways at the top of the 60 min cycle upphase from yesterday's afternoon surge. Link

Linda Piazza : 11/17/2005 3:07:40 PM

BIX tiring a bit now. RLX staying strong so far, taking over the baton.

Linda Piazza : 11/17/2005 3:05:58 PM

Advdec line dropping to that support that's been holding all day, now at 2791, with the advdec line at 2841. Remember that because the numbers are so large here that they change quickly, so that if the advdec line dips more, as it's doing as I type, that support line will dip significantly, too, perhaps to 2780 or so before its tested.

Jeff Bailey : 11/17/2005 3:05:20 PM

I can't disagree with a trader's comment regarding ICE's weakness being somewhat attributed to the weakness in energy futures today.

While a general statement, most "retail" trade for energy has been from a bullish bias, not wanting to take the risk of shorting.

Jonathan Levinson : 11/17/2005 3:01:55 PM

Headline:

2:59pm DEC. CRUDE SETTLES AT LOWEST PRICE IN 5 MONTHS

Linda Piazza : 11/17/2005 2:59:19 PM

Last night in the Market Wrap, I said that traders could use crude's reaction to its 10-sma and 200-sma and the TRAN's to its 10-sma as benchmarks for bullish or bearish positions. I said a long signal would be a crude downturn below those averages and a TRAN push above them, and the opposite for a bearish signal. I should have closed my eyes to what I saw on the charts and just gone long this morning.

However, I also said last night in the Wrap and I have been saying, that I thought the OEX was likely setting up one of its infamous ranges, and that bulls ought to protect those profits near last week's highs. That's what I'd advise now, too.

Jonathan Levinson : 11/17/2005 2:55:39 PM

Crude oil closing chart at this Link , natural gas at this Link

Linda Piazza : 11/17/2005 2:53:33 PM

Keene and Jane talk about the lack of tech buying. I've noticed something a lot lately, and I've commented on it a time or two with my relay-race analogy. I've noticed that it almost appears as if there's something going on underneath the markets. We'll have one index run up and prop up some of the others. It's been the TRAN. When it starts flagging, as if whoever is running it up starts taking some profit, another starts running up. The BIX hadn't been looking too strong today, and as soon as the TRAN showed some short-term signs of flagging strength (although not weakness) today, there were underlying signs that the BIX and RLX might pick up and take over. It's as if money is running from one sector to another, driving them up, pulling in longs, collecting their profits and then moving on to the next. Have you ever watched children walk along a line of machines dispensing candy and soft drinks, checking for coins? It's as if that's happening.

I don't know what it means, but if you're scanning charts of one sector after another, you can see it happening. It feels like manipulation to me.

Jeff Bailey : 11/17/2005 2:52:25 PM

General Motors (GM) $22.48 +5.58% ... after trading another 52-week/multi-year low at $20.60, has reversed losses to trade session highs. Company's CEO saying talk of GM going bankrupt are way overdone.

Jonathan Levinson : 11/17/2005 2:51:50 PM

Stepping away for a few minutes.

Linda Piazza : 11/17/2005 2:46:15 PM

The TRAN has now broken higher, back above that neckline for the H&S that it confirmed Tuesday. The neckline did not hold as resistance on this last test and neither did the Keltner line that first supported the TRAN and then served as resistance today. Last week's high on the TRAN was 4080.95, with the TRAN currently at 4062.80. By the way, it's possible to make out a huge inverse H&S on the TRAN, with its neckline right along the extended neckline for the former regular H&S that was confirmed. So, it's possible to conclude that the TRAN has now confirmed an inverse H&S with an upside target near 4128. I accidentally erased my old TRAN envelope chart that I'd been posting all year, but it had an upside target near 4160, I believe. However, I'm just not so sure about that. The TRAN will face daily Keltner resistance again at 4093.54, if it climbs that far.

Jane Fox : 11/17/2005 2:40:43 PM

VIX confirms ES's new daily highs but the TRIN does not. This is what bothers me so much about the TRIN it can work for while but then it just quits working, which doesn't make any sense since I think the AD line and volume are so good at determining direction. Link

Linda Piazza : 11/17/2005 2:37:09 PM

The BIX has just met its upside target for that inverse H&S. Interesting that it did that just as the OEX tested last week's high.

Jane Fox : 11/17/2005 2:36:55 PM

Dateline WSJ Conrad Black and three other executives were charged in a federal fraud indictment involving the sale of several hundred Canadian newspapers and the abuse of corporate perks. The former Hollinger chief already faces SEC civil-fraud charges.

Jeff Bailey : 11/17/2005 2:34:10 PM

Dow Jones Home Construction (DJUSHB) 923.14 +5.04% Link ... 200-day SMA alert. Back for a second-try.

Linda Piazza : 11/17/2005 2:34:48 PM

The OEX hit five-minute Keltner resistance at 570.62, but of course it's the more important double-top from last week's high that's being tested here. If I were seeing the advdec line fail to bounce from that support that's been holding it up all day, this would be a good level at which to attempt a bearish position, but it's so far holding that support. Still looking weaker than it did earlier on each bounce, but still holding the support.

Jonathan Levinson : 11/17/2005 2:33:18 PM

Volume breadth +3.4:1 on the NYSE, +2.7:1 on the Nasdaq.

Linda Piazza : 11/17/2005 2:32:28 PM

TRAN back at that neckline again, retesting it again, just a few points above it now, I believe, if I've drawn it correctly, but still in a testing mode. TRAN at 4057.51.

Jonathan Levinson : 11/17/2005 2:32:24 PM

This move has been a lot more bullish for the YM and ES than it has for NQ, with new highs from the Dow and SPX while QQQQ languishes at/below the 41 level. Looks like the broader markets are playing catch-up here. Link

Linda Piazza : 11/17/2005 2:30:36 PM

Double-top test on the OEX.

Jeff Bailey : 11/17/2005 2:30:05 PM

Covered call buy back alert ... let's close out the WellPoint WLP Nov. $75 Calls (WLP-KO) at the offer of $2.50.

WLP $77.46 +1.74%

Jane Fox : 11/17/2005 2:28:52 PM

TICKS +1000

Linda Piazza : 11/17/2005 2:28:40 PM

The RLX has a way to go to meet its 467.26 upside target from its inverse H&S. The RLX's formation is a larger one than the BIX's, but it's doing its part to climb, too. BIX at 461.61 as I type.

Linda Piazza : 11/17/2005 2:27:07 PM

BIX still climbing toward its 358.65-ish upside target from its inverse H&S. BIX at 358.04 as I type.

Jeff Bailey : 11/17/2005 2:26:51 PM

02:00 Internals found at this Link

Jonathan Levinson : 11/17/2005 2:26:16 PM

Crude oil is now at a new low for the week at 56.30, -2.72% with 5 minutes to go.

Linda Piazza : 11/17/2005 2:25:57 PM

Last week's high on the OEX is at 570.64. OEX at 570.03 as I type.

Linda Piazza : 11/17/2005 2:25:21 PM

The advdec line continues to bounce from the Keltner line that has supported it all day, with that Keltner line at 2627 currently, and with the advdec line at 2880. Bears have to see that change, in addition to having seen the TRAN begin to show some chinks in its bullish armor as far as its response to Keltner support and resistance.

Linda Piazza : 11/17/2005 2:20:31 PM

The RLX has also confirmed its inverse H&S on its 10- and 15-minute charts.

Linda Piazza : 11/17/2005 2:19:50 PM

That bounce in the OEX took it back up to test the former support of the rising regression channel in which it was climbing earlier today and it's again turning down from that test (although only slightly so), as it turned down when it tested it at about 1:38. It actually appears to be forming another rising regression channel just under that one, with the top of that channel the bottom of the former one.

Again, there's really no use in microanalyzing all this on an opex Thursday. Keep raising your stops under the OEX as it climbs. Be aware of developing bearish divergences that will someday mean something but perhaps not today. Keep a watch on the TRAN, with the TRAN continuing to find resistance where it earlier found support and not having yet followed some other indices by producing a new high for the day. If you're bullish, you don't want to see the TRAN plummet, although I've been pointing out the role that the BIX has had in taking over the baton for bullish OEX relay runners. It's at a new high for the day, having confirmed that inverse H&S on its 10 and 15-minute charts.

Jonathan Levinson : 11/17/2005 2:17:43 PM

Crude oil is testing yesterday's low: Link

Linda Piazza : 11/17/2005 2:13:15 PM

I show the SPX at the descending trendline off the 8/03 high, perhaps inching above it as I type.

Linda Piazza : 11/17/2005 2:11:37 PM

The OEX just confirmed another continuation-form inverse H&S.

Jane Fox : 11/17/2005 2:11:22 PM

TICKS +1000

Jeff Bailey : 11/17/2005 2:11:14 PM

02:00 Market Watch found at this Link

Jonathan Levinson : 11/17/2005 2:10:17 PM

Session low for crude oil at 56.85, -1.025.

Jonathan Levinson : 11/17/2005 2:09:31 PM

15-min candle view of QQQQ offers no more clarity than the shorter 3 min candles, with a listless upphase sliding sideways near the top of its range. 40.10 continues to appear as a cluster of channel and pivot resistance, but price is so flat at this point that the indicators will follow a break in either direction when it occurs. Link

Linda Piazza : 11/17/2005 2:04:38 PM

Don't you get nervous when they start talking on CNBC about how economic indicators (current discussion on flattening yield curve and its usual forecast of a slowing economy) don't mean what they used to mean? Didn't we use to hear that about P/E ratios with respect to Internet companies and other numerous examples?

Jeff Bailey : 11/17/2005 2:03:49 PM

ICE $36.95 -5.85% ... updated intra-day chart at this Link

Jonathan Levinson : 11/17/2005 2:01:10 PM

Volume breadth +2.9:1 on the NYSE, +2.5:1 on the Nasdaq.

Linda Piazza : 11/17/2005 1:58:49 PM

As I mentioned earlier, however, the BIX is trying to take over the bullish relay race for the flagging TRAN, doing its best to rev up. It's near its high of the day, testing the horizontal version of its inverse H&S neckline, at 356.68, with the BIX at 356.42 and having just risen to 356.48.

Linda Piazza : 11/17/2005 1:56:09 PM

The TRAN fell away from its retest of the Keltner line that had first supported it and now apparently serves as resistance. This is just a minor drop, only about 10 points so far, with the TRAN possibly due for another short-term bounce somewhere in the current level down to the next ten points, but the TRAN is following through on some short-term signs of weakness. As I said earlier, it's only a chink in its bullish armor, but perhaps significant because of the neckline test that occurred today.

Bounce attempt beginning as I typed.

Jonathan Levinson : 11/17/2005 1:54:29 PM

Session low for crude oil here at 57.15, -.725.

Keene Little : 11/17/2005 1:48:59 PM

Marc, I agree. And one of the reasons will be to get out of their union contracts and pension obligations. Once they do that, Ford will need to follow in order to be competitive. The steel industry and the airlines have set the example how to do it.

Jonathan Levinson : 11/17/2005 1:48:27 PM

Session high for ten year notes here at 109 11/64, TNX down 4.7 bps to 4.437%.

Keene Little : 11/17/2005 1:47:35 PM

Mark, that's the sad thing about these "valuation upgrades" that sucks in retail buyers so that the institutions can unload their stock. It's criminal but they'll never get prosecuted for it.

Jonathan Levinson : 11/17/2005 1:47:29 PM

35 year quarterly log-scale chart of GM at this Link , each candle representing one fiscal quarter. My grand-dad owned a sky-blue Delta 88, and was always a GM man.

Linda Piazza : 11/17/2005 1:46:21 PM

Equal high test on the OEX.

I don't want to keep saying too much. If you're long, keep tightening your stops. If you're bearish, hope that the advdec line drops below a support line currently at 2463 and then stays below that line on subsequent retests, and that the TRAN begins dropping heavily now that it's retested that Keltner resistance and that neckline again. Advdec line now at 2635.

Jonathan Levinson : 11/17/2005 1:44:27 PM

SAN FRANCISCO (MarketWatch) -- Standard & Poor's equity analysts on Thursday raised their rating on General Motors (GM: news, chart, profile) stock two notches to hold from strong sell, citing valuation after recent selling drove shares to an 18-year low. The analysts have a $22 price target on GM stock, and don't see a Chapter 11 filing from the world's biggest automaker on the horizon. "We do not expect a bankruptcy during at least the next 12 months, as we think General Motors has sufficient near-term liquidity," the analysts wrote.

Does an upgrade from "sell" to "hold" mean to hold shorts initiated on the "sell" reco?

Jane Fox : 11/17/2005 1:43:02 PM

It has been a long time since we have seen this tajectory and it fills the bull's heart with joy. Link

Linda Piazza : 11/17/2005 1:42:51 PM

The advdec line still bounces from that Keltner support that's been holding all day, the same support that finally failed for the TRAN.

Linda Piazza : 11/17/2005 1:42:11 PM

The TRAN currently retests, from the underside, the Keltner line that had supported it earlier today day, now at 4055.42 on three-minute closes. TRAN at 4052.39, having reached to 4054.60 during this three-minute period.

Jane Fox : 11/17/2005 1:40:32 PM

TICKS +1000

Keene Little : 11/17/2005 1:38:50 PM

Jonathan, remember all those valuation upgrades, especially on the tech stocks, in 2000 and 2001? So if I like GM at $20, I'm absolutely going to love it at $15.

Jonathan Levinson : 11/17/2005 1:38:19 PM

QQQQ's range is as flat as a pancake here, resting on the sideways 72 SMA through a listless short cycle downphase: Link

Linda Piazza : 11/17/2005 1:36:50 PM

OEX currently attempting to confirm an inverse H&S on its two-minute chart. Such a mixture of evidence, everywhere.

I'm not opposed to bullish plays, but lately one has to do it in the face of signals that usually mean a bearish play should be entered. One has to have faith that those bearish signals mean absolutely nothing when any experienced trader knows that at some point--probably exactly the point at which that trader enters a bullish play--they will mean something. Today, I don't have that faith that they mean nothing. I concede the possibility that markets are just going to zoom higher and that the advdec line could hang up right where it is all day long. It can and has happened. I'm not going long, though.

Jeff Bailey : 11/17/2005 1:36:05 PM

Cancel order alert ... Cancel the order to buy and additional 1/3 bullish position for ICE (see 09:46:31 AM) of $42.60.

Jonathan Levinson : 11/17/2005 1:35:20 PM

Headlines:

[GM] S&P EQUITY ANALYSTS HAD RATED GM STOCK STRONG SELL

[GM] S&P EQUITY ANALYSTS RAISE GM STOCK RATING TO HOLD

[GM] S&P EQUITY ANALYSTS CITE VALUATION FOR GM STOCK UPGRADE

Linda Piazza : 11/17/2005 1:33:10 PM

The advdec line is still trying to bounce from that same support that has held it up all day, now having climbed to 2395, right under the current advdec level of 2451. Like the TRAN earlier, the advdec line has begun to show some relative weakness with each bounce from this support, however. It's not beginning to cling to this line more than bounce from it. That could change, but this sort of change preceded the TRAN's drop from its rising wedge. The TRAN has just now risen to retest the former support. It dropped back from that test but hasn't confirmed with a new recent low. Still iffy and still microanalyzing here.

Jeff Bailey : 11/17/2005 1:32:56 PM

Bullish swing trade stop alert ... on the 1/3 bullish position for ICE $37.00

Jonathan Levinson : 11/17/2005 1:31:12 PM

I haven't dug out the full story, but here's the headline:

1:28pm GM S P EQUITY ANALYSTS CITE VALUATION FOR GM STOCK UPGRADE

GM trades +.07 at 21.36, just off 14-year lows.

Linda Piazza : 11/17/2005 1:30:42 PM

So far, the OEX's rise has taken it only far enough to retest the rising regression channel's broken support, with this channel being the one in which it climbed off the 11:00 five-minute swing low. So far, that former support has held as resistance, but bears need a two-minute close beneath the 100/130-ema's at 568.60 and 568.42 to confirm that. OEX at 568.92 as I type.

Marc Eckelberry : 11/17/2005 1:27:15 PM

NQ is starting a series of lower highs and lower lows.

Jeff Bailey : 11/17/2005 1:26:47 PM

01:00 Internals found at this Link

Marc Eckelberry : 11/17/2005 1:26:02 PM

I'm sorry, did I say 600 points? The DOW is 1000 points away from an all time high. The TRAN hit an all time high Monday, so give the DOW two weeks max to catch up, but the DOW theory is that the longer we wait to even the score, the more bearish the scenario. In any case 1000 DOW points in 2 weeks, I have a tower in Paris to sell you.

Jonathan Levinson : 11/17/2005 1:21:06 PM

Volume breadth is down to +2.87:1 on the NYSE, +2.3:1 on the Nasdaq, still very strong.

Linda Piazza : 11/17/2005 1:20:00 PM

Since late yesterday, the OEX has been bouncing from its two-minute 100/130-ema's, currentlya t 568.55 and 568.36, respectively. It's starting a bounce from them as I type. Bears would like to see it keel over below those averages instead, or at least rise only into a retest of the just violated rising regression channel, at about 569.15. The OEX is at 568.79 as I type.

Marc Eckelberry : 11/17/2005 1:18:06 PM

The DOW would have to move up 600 points in the next week to invalidate the bearish DOW theory reading. Right.

Linda Piazza : 11/17/2005 1:16:58 PM

TRAN dropping more significantly now, at least on a two-minute chart. It dropped out of the rising wedge, then out of the rising regression channel that I also drew, tested it, and now drops away. It's still near the day's high, but beginning to show some initial signs of chinks in its bullish armor. It touched, exactly, that neckline for the former H&S that it confirmed on Tuesday. It rose into an appropriate right-shoulder level for a bigger H&S on its 60-minute chart. If it should drop precipitously (a big "if"), then it might bring other indices lower, too.

Jeff Bailey : 11/17/2005 1:16:35 PM

Chic. Merc (CME) $377.97 (unch) ...

Jeff Bailey : 11/17/2005 1:16:01 PM

Chic. Board of Trade (BOT) $115.00 +1.62% ...

Jonathan Levinson : 11/17/2005 1:15:21 PM

Session high for ten year notes at 109 5/32, TNX -4.1 bps at 4.443%, while IRX rises +.5 bps to 3.915%.

Jeff Bailey : 11/17/2005 1:15:03 PM

ICE alert $38.30 -2.42% ... breaks below yesterday's low. Session high has been $41.75.

Marc Eckelberry : 11/17/2005 1:12:37 PM

DOW theorists are starting to agree as well. Russell has turned bearish.

Marc Eckelberry : 11/17/2005 1:12:01 PM

I am not part of the year-end rally 99% crowd right now. I think this rally ends in November. The question is when.

Jonathan Levinson : 11/17/2005 1:11:55 PM

Oscillator-wise, QQQQ's 60 min cycle is stalled right at the top on a bearish kiss. The 60 min cycle upphase has paused just below overbought territory, while the 30 min cycle has rolled over from overbought. The short cycle indicators are directionless, sliding sideways. I don't think that cycles have much to do with it by this point as we approach op-ex Friday. Link

Marc Eckelberry : 11/17/2005 1:11:25 PM

Fearful January put holders, warm your heart with this. December QQQQ 41 pc ratio at a whopping 0.30, showing extreme level of optimism.

Jeff Bailey : 11/17/2005 1:10:16 PM

01:00 Market Watch found at this Link

Linda Piazza : 11/17/2005 1:08:01 PM

The OEX has also just dropped out of the rising regression channel in which it's been trading higher since the 11:00 five-minute low. It's not dropping as quickly as I'd like to see it do, and instead is rising right back to test that channel.

Jeff Bailey : 11/17/2005 1:06:24 PM

TASR Option Chain ... here's what I see at this Link ... Why would a trader be trading a Nov. $12.50 Put today? He/she isn't closing out an open position, they're opening it up.

Jonathan Levinson : 11/17/2005 1:05:43 PM

QQQQ volume is running roughly equal to yesterday's sub-average rate, with 42M QQQQs traded so far compared with yesterday's 65.9M shares and the 102.3M average. Breadth remains strongly positive.

Linda Piazza : 11/17/2005 1:05:04 PM

The TRAN is out of its rising regression channel. It's dropping, but needs to drop further and more sharply to change sentiment.

Linda Piazza : 11/17/2005 1:03:31 PM

The RLX also has a potential inverse H&S on its 10 and 15-minute charts, but it's a bigger one with a better defined neckline than the BIX's. The neckline for the RLX is clearly at the 459.81 level, with the RLX currently at 458.59. The RLX and the BIX apparently are trotting ahead of the flagging relay runner, the TRAN, ready to take over and run the rest of the race. Maybe.

The TRAN's last bounce from its rising wedge support did not carry it far from that support, with the TRAN already dipping down to that support again, now at about the TRAN's current 4052.07 level or perhaps just slightly above that. Remember, you need to see a precipitous fall in the TRAN if it violates it and not just a small decline and another bounce, which would suggest that the TRAN is just reforming that rising wedge into a more stable rising regression channel.

Linda Piazza : 11/17/2005 12:58:52 PM

The advdec line did confirm that continuation-form inverse H&S and it does climb after doing so, and it does continue bearish divergences with RSI as it does so. It's attempting a breakout on its 60-minute chart without ever producing any kind of pullback at all.

Linda Piazza : 11/17/2005 12:56:29 PM

The BIX may be attempting to take over for the TRAN, if it tires, and the TRAN is showing some slight signs of tiring. The BIX is attempting a breakout above the neckline of an inverse H&S on its 10-minute chart. It has either done so, or will upon a break above 356.68, depending on how that neckline is drawn. The BIX is at 356.33 as I type.

Jeff Bailey : 11/17/2005 12:53:43 PM

Taser Intl. (TASR) $7.38 +0.40% ... stock did trade a sessiion high of $7.54 ($7.50 looks to be a "Max Pain") level.

However, note the 2,150 contracts traded in the Nov. $12.50 Put (QUR-WV) at $5.10, which came on a downtick (so seller).

OI is just 318 and the 2,150 a little unusual.

$12.50 - $5.10 = $7.40.

Trader's might want to be alert for some upside action if day's high is taken out.

Jane Fox : 11/17/2005 12:51:31 PM

TICKs +800

Jonathan Levinson : 11/17/2005 12:51:30 PM

No weakness for gold as the Dec. e-mini rises to a +7 gain at 486. Session high has been 487.80. Updated daily chart at this Link whows the daily cycle upphase strengthening. 479-481 becomes support, followed by 475 confluence above the 470-471 breakout point.

Linda Piazza : 11/17/2005 12:50:49 PM

TRAN testing that rising wedge support, but it hasn't broken it yet.

Linda Piazza : 11/17/2005 12:49:05 PM

Here is why I said I'm not getting a long signal. This is a bearish signal instead, but that kind of bearish divergence can continue all day, as we know. I don't think it should, but this is opex Thursday and no one consulted me. Link

Linda Piazza : 11/17/2005 12:45:08 PM

That is such a rising wedge in which the TRAN has been climbing since about 9:45 this morning, up to retest that neckline. It's narrowed significantly now, with the boundaries at about 4051 on the downside and 4057.40 on the upside. The TRAN is at 4052.96 as I type. I'm not even going to say anything about which way a rising wedge should break, because they just don't follow through so many times and haven't for years. Just watch the boundaries. On a downside break, be wary of the possibility that the TRAN is just widening the formation into a more stable rising regression channel. If it breaks to the downside through that wedge, you want to see a sharp drop to confirm the break.

Jonathan Levinson : 11/17/2005 12:43:49 PM

QQQQ holds so far at a lower high after bouncing from a higher low. This is reminiscent of yesterday's coil/pennant, except that today's occurs at the top of a rise, whereas yesterday's occurred at the bottom of a decline. Link

Linda Piazza : 11/17/2005 12:40:08 PM

The advdec line still bounces from that same Keltner line that's been bouncing it all day, currently at 2162, with the advdec line now at 2420. There's been no change. The TRAN is showing a little less strength with respect to an analogous Keltner line, occasionally closing three-minute periods just below it and beginning to hug the line rather than bouncing from it. That's at 4053.65 for the TRAN, with the TRAN currently at 4053.61. I think that both the TRAN and the advdec line have to significantly violate this support before today's upward trend has even begun to change.

Jane Fox : 11/17/2005 12:40:04 PM

WE have not seen these two this bullish for almost all of November. We have finally gotten out of the quicksand for now and let's hope we don't fall back into it. Link

Jane Fox : 11/17/2005 12:37:20 PM

TICKS +800

Jonathan Levinson : 11/17/2005 12:33:56 PM

Volume breadth is back up to +3:1 on the NYSE, +2.5:1 on the Nasdaq.

Linda Piazza : 11/17/2005 12:33:33 PM

The TRAN's high has been 4056.11, at or even slightly above that neckline it broke through on Tuesday. It's at 4054.78 as I type.

Linda Piazza : 11/17/2005 12:31:56 PM

New high of the day for the OEX. Next resistance currently 569.72 on 15-minute closes. Tentative bearish divergence on the 15-minute chart on this push higher. There's Keltner-style bearish divergence, too. If you're already long, follow the OEX higher with your stops. There could be a Keltner breakout and a trending move higher, but I'm just not getting a new long signal here.

Linda Piazza : 11/17/2005 12:28:11 PM

The OEX's former H&S pattern on the two-minute chart has morphed into a possible cup-and-handle formation. These are valid continuation patterns. It hasn't been confirmed yet, but the OEX is at least trying hard for that equal-high test. The TRAN rises toward that former neckline, too, with the TRAN at 4054.49 as I type.

The advdec line has an inverse H&S on its three-minute chart, not the usual continuation pattern, but something to watch. Bullish to bearish to bullish again. Strange day, but I'm not getting a bullish signal here. The minimal advdec line pullback wasn't deep enough to relieve overdone pressure, so no signal for me.

Jonathan Levinson : 11/17/2005 12:27:20 PM

Back to find ten year note yields holding a 2.9 bp loss at 4.455% while IRX is flat at 3.912%. QQQQ is bouncing back to the top of the previous high, invalidating what appeared earlier as a possible head and shoulder setup. 30 min cycle channel resistance holds just above the session high at 40.09 currently. Link

Linda Piazza : 11/17/2005 12:22:17 PM

That advdec line just hangs weightless near the day's high. The last 60-minute period produced a doji after a tall white candle, but so far, there's been no pullback during this 60-minute period to conplete the possible reversal signal. I actually think it would have been healthier--rally wise--if it had pulled back already and then punched back higher. Way back in September, on the morning of 9/26, the advdec line hung at this same resistance level, with a similar RSI reading, through the first three hours of trading and then tumbled until the last hour, when there was a rebound. What was the OEX doing that day? It hung near its high of the day, too, eventually dropping when the advdec line did, falling more than five points from its high before that last hour rebound. That does not mean that pattern will repeat today. We really have to see a pullback and how it performs before we know much of anything. It's just that if we'd already seen that pullback, and then had a punch higher that hugged resistance, we'd know we had a trending-higher day. We don't know that yet. We have a strangely performing day.

Jeff Bailey : 11/17/2005 12:19:33 PM

I need to shut down and reboot my computer. Be back in about 10 minutes.

Jane Fox : 11/17/2005 12:16:02 PM

These charts are telling you you do not want to be short. Link

Jeff Bailey : 11/17/2005 12:11:39 PM

12:00 Internals found at this Link

Linda Piazza : 11/17/2005 12:09:25 PM

All day, the advdec line has found support on a line now at 2020, now being tested with the advdec line at 2090, QCharts value. The equivalent line on the TRAN's chart is at 4050.79, with the TRAN testing that level now.

Linda Piazza : 11/17/2005 12:07:20 PM

Sorry, Jonathan. I didn't mean to reiterate what you'd already reported on the Philly Fed. I thought you'd already stepped away.

Linda Piazza : 11/17/2005 12:06:30 PM

According to another source, the median estimate for the Philly Fed had been 16.00. October's 17.3 had been far above September's 2.2 and the prices paid component in October had jumped to the highest since 1980. The hope had been that the prices paid component would drop with the drop in crude, and it did, but was that drop to 56.8 from the 67.6 enough?

Linda Piazza : 11/17/2005 12:03:13 PM

Marketwatch: Nov. Philly Fed new orders 12.7 vs. 18.6. Prices paid 56.8 vs. 67.6.

Jonathan Levinson : 11/17/2005 12:03:02 PM

Headlines:

NOV. PHILLY FED INDEX 11.5 VS. 17.3

NOV. PHILLY FED PRICES PAID 56.8 VS. 67.6

NOV. PHILLY FED NEW ORDERS 12.7 VS. 18.6

Jeff Bailey : 11/17/2005 12:02:44 PM

12:00 Market Watch found at this Link

Linda Piazza : 11/17/2005 12:02:30 PM

Marketwatch headline: Nov. Philly Fed index 11.5 vs. 17.3.

Linda Piazza : 11/17/2005 12:01:20 PM

Bearish divergences on the advdec line are now showing up through the 15-minute chart. It hasn't turned down significantly from its last test of the resistance in the 2250-2350 zone, however. It's at 2112 as I type.

Jonathan Levinson : 11/17/2005 12:00:56 PM

Stepping away for a few minutes.

Linda Piazza : 11/17/2005 11:58:54 AM

TRAN right up underneath that neckline now, if I've drawn the neckline correctly. TRAN at 4054.06 and the neckline is at about 4055.75.

Linda Piazza : 11/17/2005 11:56:41 AM

I see the Philly Fed listed at noon today on two different calendars, so make your decision now as to whether you want to hold over.

Jonathan Levinson : 11/17/2005 11:53:54 AM

QQQQ is trading sideways, extending what could be a right shoulder on an intraday head and shouler pattern above the 40.83 low. The short cycle indicators are neutral, however, trying to cut short a weak downphase. With the 72 SMA up to meet the session low at 40.83, a break of that level should be a reliable indication of a head and shoulders break and a new 30 min cycle downphase. I'm having a lot of difficulty reading the intraday cycles this week, because they've been so out of step with the price action. Link

Linda Piazza : 11/17/2005 11:53:54 AM

Unless I looked at the calendar wrong, we have the Philly Fed in a few minutes, at noon.

Linda Piazza : 11/17/2005 11:51:15 AM

TRAN still coiling beneath that neckline's resistance, from the neckline of the H&S confirmed Tuesday. The TRAN is coiling at the appropriate right shoulder level or perhaps slightly lower than that level for a bigger H&S on its 60-minute chart. It would need to drop below about 3985 to confirm that formation. It's at 4050.99 as I type.

Jonathan Levinson : 11/17/2005 11:46:46 AM

From the Treasury's website:

The Treasury will auction 13-week and 26-week Treasury bills totaling $34,000 million to refund an estimated $32,912 million of publicly held 13-week and 26-week Treasury bills maturing November 25, 2005, and to raise new cash of approximately $1,088 million. Also maturing is an estimated $18,000 million of publicly held 4-week Treasury bills, the disposition of which will be announced November 21, 2005.

Linda Piazza : 11/17/2005 11:44:23 AM

The BIX just attempted another bounce above its 200-sma and 10-sma, but it's not clear whether it can stay above them this time, either. Each successive bounce today has stopped at a lower level. BIX at 355.62 as I type.

Linda Piazza : 11/17/2005 11:41:00 AM

Definite attempts not to let H&S's confirm on two-minute charts on the OEX, but also the SPX and NDX.

Jonathan Levinson : 11/17/2005 11:40:43 AM

Headlines:

11:39am GERMANY'S DAX UP 0.4% AT 5,099 AS TRADING ENDS

11:39am FRANCE'S CAC-40 GAINS 0.2% TO 4,523

11:39am U.K.'S FTSE 100 ADDS 0.6% TO 5,460

Linda Piazza : 11/17/2005 11:39:13 AM

Advdec line rises to test the resistance in the 2250-2320 zone, with the advdec line at 2280 as I type.

Jonathan Levinson : 11/17/2005 11:39:00 AM

Ten year note yields are down to a 1.7 bp loss at 4.467%, 13-week rates are down .5 bps at 3.907%, flattening the yield curve.

Jane Fox : 11/17/2005 11:37:30 AM

TICKS +800

Linda Piazza : 11/17/2005 11:36:42 AM

Unless the OEX heads down within the next five minutes or so, I'd say that H&S formation on the two-minute chart has been invalidated because of the time it's chopping around in the right-shoulder level. OEX at 568.58, right-shoulder level at 568.80 or so, and an equal-high test might be made instead if the H&S isn't confirmed.

Jeff Bailey : 11/17/2005 11:41:27 AM

Dow Components which is a PRICE weighted index at this Link ... In the past, we've seem some VERY big upside and downside price action in a component just ahead, or during an option expiration. It can bring GREATER volatility to the trade on a near-term basis.

MO's 2.2% decline not all that much (we've seen 10% and 20% declines in a component that really messes things up), but with MO such a large weighting, the stock must be monitored closely by index traders.

What tends to happen, is that computers begin to "overweight" and "underweight" some components relative to the indices theoretic "Max Pain" level for expiration. With MO down 2%, computers may have to "sell a little more" and "buy a little more" of certain components to try and keep things squared up.

QQQQ traders have seen how things trade when things get out of square to the upside of theoretic "Max Pain" levels. Same can happen to the downside.

In the past, we've seen a "bearish day" in the INDU/DIA due to one component getting crushed, see the index move sharply inverse (to the upside) the following day, or at least reverse the prior days losses, especially into or at the monthly expiration.

This perhaps makes sense. MARKET participants may "sell that stock" on the bad news, it creates a downside move from the "Max Pain" level that day. But the following day, things get rebalanced, and the inverse move comes.

Linda Piazza : 11/17/2005 11:28:09 AM

TRAN at 4051.16 with the high of the day at 4052.30 and with the neckline of that confirmed H&S from earlier in the week at about 4055.34.

Linda Piazza : 11/17/2005 11:26:11 AM

The OEX is still within the potential H&S formation on its two-minute chart, but there's a danger that the right shoulder is extending a bit too long in time. As I noted when I first mentioned this H&S possibility, there's a chance of an equal-high test instead if bears can't confirm this H&S. Shoulder level approximately up to 568.80 or so, with the OEX now at 568.27. It's been high enough to constitute a right-shoulder test and can't seem to either bump to the top of the right shoulder or drop to confirm the thing.

Jonathan Levinson : 11/17/2005 11:23:09 AM

Volume breadth is +2.1:1 on the NYSE, +2:1 on the Nasdaq.

Jeff Bailey : 11/17/2005 11:18:35 AM

11:00 Internals found at this Link

Linda Piazza : 11/17/2005 11:17:09 AM

Possible H&S on the OEX's two-minute chart. Need a two-minute close beneath the 100/130-ema's at 567.75 and 567.58 to confirm that. OEX at 568.22. Be aware of the possibility of a double-top test instead. Head at today's high, shoulder at about 568.80.

Jonathan Levinson : 11/17/2005 11:12:04 AM

QQQQ update at this Link , bouncing from a partial gap fill and double bottom support at 40.83. 72 SMA support is at 40.82, below which the longer intraday cycle upphases will stall and begin to turn.

Jonathan Levinson : 11/17/2005 11:08:06 AM

Crude ois back down to a session low of 57.65, -.225. Natgas -.20 at 12.13.

Jeff Bailey : 11/17/2005 11:08:05 AM

11:00 Market Watch found at this Link

Marc Eckelberry : 11/17/2005 11:05:11 AM

I have cost averaged my QQQQ Jan 41 puts to $1. With Dec and Jan pc ratios at these levels well below .50, the trade is pretty safe.

Linda Piazza : 11/17/2005 11:04:27 AM

OEX may bounce up to 568.50-568.75 again. Bears want to see it stay below that.

Marc Eckelberry : 11/17/2005 11:04:12 AM

When you can put your money in a goverment two year at 4.4%, who do you think is going to win? That's right, not stocks. The DOW is flashing warning signs, hundreds of points away from a new high while the Transports does one.

Jonathan Levinson : 11/17/2005 11:01:00 AM

Headline:

11:00am POOLE: FED DOING BEST TO KEEP CORE INFLATION LOW

11:00am POOLE: FED WAS WISE NOT TO OVERREACT TO HIGHER ENERGY PRICES

11:00am POOLE: SOME UNDERLYING INFLATION TRENDS RAISE CONCERN

11:00am POOLE: HIGH ENERGY PRICES WON'T IMPACT CORE INFLATION

11:00am POOLE SAYS INFLATION EXPECTATIONS ARE 'WELL-ANCHORED'

11:00am FED'S POOLE SEES CORE INFLATION REMAINING 'FAIRLY STABLE'

Jonathan Levinson : 11/17/2005 10:59:36 AM

Volume breadth is down to +2.05:1 on the NYSE, +1.7:1 on the Nasdaq.

Jeff Bailey : 11/17/2005 10:59:43 AM

Altria (MO) $71.77 -2.86% Link ... Dow Industrials heavyweight (#3) lower after Goldman Sachs downgraded the stock, saying the company's planned break-up may come much later than expected.

Analyst Judy Hong said she feels the current consensus estimate that the break up would occur in early- to mid-2006 is "overly optimistic." Hong said she is concerned that potential certification of litigation may push the break up date by at least 2 years.

Marc Eckelberry : 11/17/2005 10:56:38 AM

Stepping away. The more days the DOW trades away from the Transports, the more the DOW theory becomes meaningful. You can bet some serious money is now looking at this bearish development.

Marc Eckelberry : 11/17/2005 10:55:15 AM

I added a few more contracts at .95 to the QQQQ jan 41 puts. VXN is overreaching again.

Linda Piazza : 11/17/2005 11:00:24 AM

I wouldn't be surprised to see the TRAN drop toward 4040 (now at 4047.80) and then attempt to rise again, so we may not be through with the chopping around this morning. (This post originally at 10:54:49, but I needed to make a spelling correction, so the time stamp will change.)

Jonathan Levinson : 11/17/2005 10:53:46 AM

QQQQ hit our stop, advanced one penny, and is now back to our 40.90 short entry. All week I've been watching those cycles abort early, and today they didn't.

Linda Piazza : 11/17/2005 10:48:33 AM

I can't stop watching the BIX. It keeps trying to bounce back above those 200-sma and 10-sma's, but it can't stay above them. It's back below them again. Of course, I guess you could turn that around and say that bears keep trying to drive it lower and it keeps bouncing back. Yet, the objective for bulls is to keep it above those important averages and they can't do it yet today. BIX at 355.09 as I type.

Jeff Bailey : 11/17/2005 10:47:26 AM

EIA Weekly Crude Oil, Gasoline, Distillate, Nat Gas Inventory Table found at this Link

Linda Piazza : 11/17/2005 10:46:31 AM

TRAN edging ever closer to that former neckline for its H&S that was confirmed Tuesday. TRAN at 4050.95 as I type.

Linda Piazza : 11/17/2005 10:45:17 AM

I'm thinking another push higher in the advdec line still isn't precluded before the real pullback, and I see one starting as I type. Remember that even the real pullback might be just that--a pullback.

Linda Piazza : 11/17/2005 10:44:17 AM

Advdec line not dropping as much as I'd like with the OEX pulling back, in that it's not corroborating the move in the way that would be needed for smooth and predictable market action. The OEX sometimes front-runs the advdec line moves or tries to, but there's a mixture of evidence here, keeping both bulls and bears on their toes.

Linda Piazza : 11/17/2005 10:36:58 AM

The OEX hit 15-minute Keltner resistance and has pulled back. Here's a chart. Note the action as the black channel line was hit. Link This occurred as the advdec line was showing the potential for a pullback. I'm worried that without TRAN participation in a pullback, though, the advdec line will just coil, so there's risk that, although it looks setup for a pullback at least, if not anything stronger, that the pullback still won't occur. The TRAN is at a right-shoulder level and it could just chop around inside that right shoulder, so that's the risk to those with bearish hopes. All is set up for a pullback, but that's not any guarantee it will happen, especially in this market and especially on an opex Thursday.

Linda Piazza : 11/17/2005 10:32:12 AM

Slightest pullback in the advdec line.

Jonathan Levinson : 11/17/2005 10:31:35 AM

Natural gas is back up to a .04 loss at 12.29.

Jonathan Levinson : 11/17/2005 10:31:17 AM

Headline:

10:30am DOE: NATURAL GAS UP 53 BILLION CUBIC FEET IN LATEST WEEK

Linda Piazza : 11/17/2005 10:29:19 AM

It's possible that the advdec line is getting ready to pull back now. There's been tentative bearish divergence at extreme levels on the five-minute chart, so the evidence is tentative as yet.

Jeff Bailey : 11/17/2005 10:27:11 AM

QQQQ yesterday's closing options chain ... Sorted by volume on top, same Nov./Dec near the money we've been looking at for weeks at this Link

Jonathan Levinson : 11/17/2005 10:26:35 AM

Crude oil trades +.225 at 58.10, natgas -.205 at 12.125 ahead of the natural gas inventory data.

Jane Fox : 11/17/2005 10:26:02 AM

... anyway the AD volume is making new daily highs, which is bullish and usually trumps the other internals.

Jane Fox : 11/17/2005 10:24:59 AM

TRIN continues to make new daily lows confirming the ES's new daily highs but the VIX is not making new daily lows supporting this bullishness. Geesh!

Linda Piazza : 11/17/2005 10:25:06 AM

No new HOD yet for the TRAN. It's still in an appropriate right-shoulder level for a H&S on its 60-minute chart, and a further climb wouldn't invalidate the formation either since the neckline slopes so steeply upward. It would take a new record high to invalidate the formation, I believe. The TRAN more than met the downside target from the H&S on its 15-minute chart (with that one now forming the top of the head of the larger one) and now comes up to retest the neckline of that H&S that was confirmed Tuesday morning. The neckline is now at about 4055, if I've drawn it correctly, with the TRAN now at 4046.62.

Linda Piazza : 11/17/2005 10:25:22 AM

SPX nearing the week's high of 1237.94, with the SPX at 1237.18.

Linda Piazza : 11/17/2005 10:20:35 AM

OEX Keltner picture: Next resistance now 569.40 on 15-minute closes. OEX at 569.21 as I type.

Jonathan Levinson : 11/17/2005 10:20:27 AM

QQQQ - Exit Point Alert -

Out QQQQ at 41.05 -.15

Jane Fox : 11/17/2005 10:19:48 AM

TICKs +800.

Jonathan Levinson : 11/17/2005 10:19:26 AM

Amazingly, QQQQ still holds above the 30/60 min channel tops, and predictably, my attempt to anticipate what has been a series of early reversals in the 30/60 min cycles all week is not working this morning. This move is very extended on a short cycle and daily cycle basis, but it's holding. Looking to exit, hopefully before they tap our stop.

Linda Piazza : 11/17/2005 10:18:16 AM

TRAN one-minute Keltner chart here Link and advdec line one here Link and without the labels on the side and the name at the top, you wouldn't be able to tell the difference. No question the impact of the TRAN on the rally, in my opinion.

Jane Fox : 11/17/2005 10:15:49 AM

This is not an environment where you should try going short. Link

Linda Piazza : 11/17/2005 10:15:29 AM

Careful, OEX bulls and bears alike. The BIX is slipping back below its 10-sma and 200-sma as I type. It's not far below yet, holding close enough to them that it's still just challenging them. BIX at 355.28 as I type.

Jeff Bailey : 11/17/2005 10:15:18 AM

10:00 Internals found at this Link

Jane Fox : 11/17/2005 10:14:10 AM

Linda both Mark and I follow the TRIN and we have both found the TRIN to very useful at times yet at other times it seems stuck in a range and is unable to give us any good information. Today it seems to working OK.

Linda Piazza : 11/17/2005 10:13:20 AM

The advdec line isn't quite ready to keel over and found temporary support even sooner than I expected it to do, at a tenuous support level at about 1770. Advdec line now at 1964, QCharts value. This isn't the pullback I'm expecting, at least not yet. There's usually a deeper pullback even on days when it's going to be a short-term pullback, so I'm still watching. Could be another push higher before a deeper decline, as that push higher is not yet precluded.

I tell you, if you look at the advdec line's one-minute Keltner chart and the TRAN's, they're exactly alike, with the TRAN bouncing at the same Keltner line, with that one having a value of 4040.85 currently for the TRAN and the TRAN currently at 4043.99. Got to watch the TRAN.

Jane Fox : 11/17/2005 10:09:47 AM

And sure enough TRIN to new daily lows.

Jane Fox : 11/17/2005 10:09:00 AM

AD volume is now making new daily highs not supporting the bearishness I am seeing in the VIX and the TRIN so I expect that bearishness to be reversed.

Jonathan Levinson : 11/17/2005 10:08:59 AM

Volume breadth declines to +2.3:1 on the NYSE, +1.75:1 on the Nasdaq. Prices remain firm.

Linda Piazza : 11/17/2005 10:08:25 AM

Reader D.C. points out that the TRIN has been hovering around 1.00 this morning, slightly below it as I type. I note that both VIX and VXO are headed higher from their morning lows, but I watch these on a 15-minute chart, with the 15-minute 100/130-ema's, and neither has moved above their respective 100/130-ema's yet. Jane can give us more insight, I'm sure, but I know that she cautions that TRIN can be quite volatile during the early trading period.

Jane Fox : 11/17/2005 10:07:34 AM

ES's new daily low is confirmed by a new VIX daily high and a new TRIN daily high. The bearishness is creeping in.

Linda Piazza : 11/17/2005 10:04:53 AM

Advdec line dropping now. Looking for first potential support at 1300-1500, with the advdec line now at 1845. Bears want the advdec line to plow straight through that support and bulls want it to hold.

I've been checking a lot of charts, and there's no rule about how the advdec line will behave once it reached levels this extreme this early. Some times, it keels over but there are certainly times when the initial pullback is the only one that occurs and support holds, bouncing the advdec line again.

Jeff Bailey : 11/17/2005 10:04:15 AM

10:00 Market Watch found at this Link

Jonathan Levinson : 11/17/2005 10:01:18 AM

The divergence between YM and NQ is pretty dramatic, with YM holding more than 50 points below its Tuesday high, while NQ and QQQQ hold right at/above it.

Linda Piazza : 11/17/2005 9:58:36 AM

TRAN pulling back slightly. Nothing "to write home about" as my parents used to say, but watch carefully, because that stody old index can drive fast when it gets moving, as it certainly did this morning.

Linda Piazza : 11/17/2005 9:57:00 AM

The BIX fell to its 200-sma yesterday, closing just a few cents below that average, with the average now at 355.44. The BIX has bounced this morning, now at 356.20 in what is probably a reflexive bounce. Let's see if it holds.

Jonathan Levinson : 11/17/2005 9:56:44 AM

Volume breadth declines to +2.7:1 on the NYSE, +2.8:1 on the Nasdaq, still very strong.

Linda Piazza : 11/17/2005 9:55:30 AM

The SOX is dropping to test its 10-sma and 100-sma, at 458.90 and 459.27, respectively, with the SOX at 459.54.

Jonathan Levinson : 11/17/2005 9:54:15 AM

A 4.25B overnight repo leaves us with a net 3.25B add for the day. The stop out rate rose slightly to 3.98, showing a higher demand for the money on the part of the Fed's dealers, but still below the Fed's 4% overnight target rate.

Jeff Bailey : 11/17/2005 9:53:51 AM

Swing trade covered call buy back alert ... with WellPoint (WLP) $76.77 +0.84%, let's place an order to buy back the previously sold covered calls WLP Nov. $75 (WLP-KO) for $1.10.

Linda Piazza : 11/17/2005 9:53:28 AM

Advdec line still pausing at the day's high, not yet pulling back, and maybe trying for one more push higher. I could get fooled, and it could never really turn lower today, but there is almost always a pullback from this setup, of some degree, and maybe one that brings the OEX back .75-1.5 points, even if the pullback is going to be only temporary and swiftly concluded.

Linda Piazza : 11/17/2005 9:51:20 AM

The TRAN has climbed all the way to 60-minute Keltner resistance, all the way to retest the neckline of that H&S it confirmed two days ago. There's a possibility now of a larger and more significant H&S on the TRAN's 60-minute chart. Because the neckline of that formation rises steeply, the TRAN could actually climb to retest this week's high and not violate the formation. However, a climb into the 4050-4060 and a topping off there would probably be optimal for the H&S formation. TRAN at 4047.95 as I type.

Jonathan Levinson : 11/17/2005 9:47:49 AM

Weakness in the SOX Link is having no impact on the Qs, which are grinding higher above 30/60 min channel resistance. This is far from the pop and drop open that the toppy daily cycle and intraday channel violations suggested. The stop is wider than usual on our short play from 40.90, but I'm going to be exiting soon if this strength persists. Link

Linda Piazza : 11/17/2005 9:47:24 AM

Advdec line pausing but not yet really pulling back. The move higher remains extreme across many time frames, and so I do expect a pullback of some degree and would just urge bulls to remain cautious and know whether they want their stops to be. The pullback could be minor if it's going to be a strong day or could be precipitous and deep, but we won't know until it occurs and we see its shape.

Jane Fox : 11/17/2005 9:46:31 AM

So far the bulls have me convinced. Link

Jeff Bailey : 11/17/2005 9:46:05 AM

Bullish swing trade order alert ... let's place an order to buy an additional 1/3 bullish position for ICE should the stock trade $42.60 or better, limit $43.00.

Jane Fox : 11/17/2005 9:44:52 AM

The bulls certainly have the reins this morning but it remains to be seen if they can hold on to them. I will be watching AD volume and the VIX for clues of bearishness creeping in. This month has been too difficult to read for me to just take this all at face value.

Jeff Bailey : 11/17/2005 9:43:32 AM

ICE $41.38 +5.73% ... first 10-minutes of action showed early high at $40.75 Link

Linda Piazza : 11/17/2005 9:43:16 AM

Advdec line just hanging there at strong resistance. RSI measuring an extreme move all the way up through the 60-minute chart. This could be a prelude to a strong day that sees only a minimal pullback, but there should be a pullback of some sort.

OEX Keltner picture: The OEX approaches 15-minute Keltner resistance at 569.23. Support at 568.23 and then again at near 567, with that 567-ish support looking strong so far. OEX at 568.64 as I type.

Jane Fox : 11/17/2005 9:38:17 AM

VIX is below its previous day range confirming ES above its PDR.

Linda Piazza : 11/17/2005 9:38:25 AM

Advdec line at possibly strong resistance. There's been a breakout across several charts, so this could be a breakout day in the making, but there is almost always a pullback of some degree from this level, whether small and temporary or a prelude to a deeper pullback. Just can't tell at this juncture, but I would think it would begin sometime during the first 30 minutes of trading.

Jane Fox : 11/17/2005 9:37:16 AM

AD line is +1042 but don't get too excited because the AD volume is lower than its previous day range. Volume needs to support the bullish AD line.

Jonathan Levinson : 11/17/2005 9:35:37 AM

The 30 and 60 min channel tops are at 40.80-.83 QQQQ as appears on the chart just posted.

Jonathan Levinson : 11/17/2005 9:34:22 AM

Entry based upper channel violation at the open, but high risk because the intraday cycles aren't yet maxxed out to the upside. In recent sessions, these moves have been aborting early. Link

Jonathan Levinson : 11/17/2005 9:33:19 AM

QQQQ - Entry Point Alert -

Short QQQQ at 40.90 stop 41.05

Jonathan Levinson : 11/17/2005 9:32:58 AM

Volume breadth is +2.14:1 on the NYSE, +3.05:1 on the Nasdaq at the open.

Jeff Bailey : 11/17/2005 9:32:51 AM

Bullish swing trade entry alert .... for 1/3 position in ICE $40.00.

Linda Piazza : 11/17/2005 9:32:48 AM

Advdec line opens at levels registering extreme over the very short-term period. OEX opens and climbs. The Advdec line could continue to climb for a while, but then there should be a pullback, whether temporary and short-lived or more extreme, like yesterday's. This is so far setting up exactly as yesterday did, so be careful, bulls.

The OEX's chart shows it facing its first resistance of the day, a little above it as I type, and looking more positive that the advdec line setup would indicate. That looks like a saucer formation--bullish--with the OEX breaking above it. Watching the advdec line, however, to see what it does.

Jeff Bailey : 11/17/2005 9:28:24 AM

Program Trading Levels for Thursday ... HL Camp & Company has their computers set for program buying at $+3.42 and set for program selling at $+1.39

Jonathan Levinson : 11/17/2005 9:18:24 AM

Gold trades a new high at 486.70, currently up 5.70 at 484.70 basis Dec. e-mini contract. Daily chart updated at this Link

Jonathan Levinson : 11/17/2005 9:16:47 AM

Headlines:

U.S. OCT. INDUSTRIAL PRODUCTION RISES 0.9% AS EXPECTED

U.S. OCT. MANUFACTURING OUTPUT CLIMBS 1.4%

U.S. OCT. UTILITIES OUTPUT FALLS 1.9%

U.S. OCT. CAPACITY UTILIZATION RISES TO 79.5%

U.S. MINE OUTPUT FALLS 0.5% IN OCTOBER

HURRICANE-RELATED RECOVERIES FUEL INDUSTRIAL OUTPUT JUMP

Jonathan Levinson : 11/17/2005 9:11:41 AM

QQQQ tests the highs for this move as the 30/60 min cycle upphase matures. So far, it's been strong enough to stall the daily cycle downphase, causing it to begin trending. But the day's daily print is still young. If bulls can break and hold above the 40.90 highs for today, then it will be off to the races for an upside trending daily cycle move. If that fails to occur, then this is just a retest of the daily cycle high. I will post the 30/60 min channel limits at the open when my charts refresh, and will be evaluating a short play from channel resistance depending on the opening picture.

Linda Piazza : 11/17/2005 9:03:59 AM

Yesterday, the OEX printed a doji above its converging 10-sma and 200-sma. As I began saying Tuesday afternoon, it's possible that the OEX is setting up another one of its infamous 4-6 point consolidation ranges, roughly from the 200-sma up to this week's high. Yesterday's close was near the middle of that zone, no good place from which to pick the next direction. As I type, futures are higher, but actually near their fair values. The outlook, if they stay the same over the next few minutes, would be for a flattish to slightly higher open. The higher futures aren't giving us as much guidance as their higher levels would suggest.

For guidance, we'll watch the TRAN to see if it falls below its 10-sma, and crude, to see if it climbs above that average and its 200-sma. As I type, crude appears to be just below both numbers, challenging them, so there's no specific guidance there yet, either. It could be challenging them in preparation for a pop higher or in preparation for a rollover. A TRAN drop below that 10-sma and a crude climb above that 10-sma might be equity negative, while the reverse might be equity positive. "Might be" is the operative phrase on this option-expiration Thursday, however.

Another factor not always visible to us in the equity markets relates to the currency markets. Much overnight talk centered on Bush's visit to China and a supposed secret meeting going on within China--denied, of course, whether the rumor is true or not--about a further revaluation of the yuan. Crude, being dollar denominated, will probably be impacted by any revaluation of the yuan because such a revaluation will impact the dollar against Asian currencies. If equity traders didn't have enough underground stuff to worry about this week with it being opex, there's that to worry about, too. Oh, and maybe add in the talk overnight that the flattening of the yield curve was predicting a slowdown in the U.S. economy.

I'll let you know what I see when markets set up, but it would be far better if the OEX had ended the day elsewhere than the middle of that zone and with something different than a candle indicating such indecision, unless such a candle had occurred at the bottom of a steep decline. We'd be feeling more bullish over the short-term if the doji had appeared after a steep decline rather than after a slight pullback, and I still think there might be a slight upward bias early this morning, but the question is whether that might hold or be soon reversed.

Jonathan Levinson : 11/17/2005 8:55:46 AM

The Fed has announced a 10B 14-day repo, leaving 1B with which to deal in the 10AM announcement.

Jonathan Levinson : 11/17/2005 8:44:00 AM

Session low for ten year notes here, TNX +1.4 bps at 4.498%.

Jane Fox : 11/17/2005 8:33:00 AM

Dateline WSJ This week's testimony by Washington Post assistant managing editor Bob Woodward in the CIA-leak investigation raises the prospect of additional Bush-administration officials becoming entangled in the two-year probe.

At the same time, Mr. Woodward's involvement muddies Special Prosecutor Patrick Fitzgerald's case against I. Lewis Libby, the vice president's former chief of staff and the only official indicted so far.

Mr. Woodward was interviewed for more than two hours on Monday by Mr. Fitzgerald about interviews he conducted with three current and former Bush-administration officials in June 2003. (See related story.)

One of those officials, whom Mr. Woodward wouldn't identify, told the journalist in mid-June 2003 that the wife of former Ambassador Joseph Wilson was a Central Intelligence Agency analyst working on weapons of mass destruction. That means Mr. Woodward learned from an administration official other than Mr. Libby that Valerie Plame, Mr. Wilson's wife, worked for the CIA earlier than any other journalist.

Mr. Woodward yesterday in an interview said the confidential source who first told him of Ms. Plame has allowed him to tell Mr. Fitzgerald but has refused to give Mr. Woodward permission to disclose his identity publicly.

Jonathan Levinson : 11/17/2005 8:32:32 AM

Little change, with QQQQ trading 40.93, TNX lower to a 1.3 bp loss at 4.471%, IRX still flat.

Jonathan Levinson : 11/17/2005 8:31:19 AM

Headlines:

U.S. OCT. HOUSING STARTS FALL 5.6% TO 2.014MLN

U.S. OCT. BUILDING PERMITS DOWN 6.7% TO 2.071MLN

U.S. OCT. HOUSING STARTS BELOW 2.07MLN EXPECTED

U.S. OCT. SINGLE-FAMILY STARTS OFF 3.7% TO 1.704MLN

U.S. SEPT. HOUSING STARTS REVISED UP TO 2.134MLN VS 2.108MLN

U.S. OCT. HOUSING STARTS FALL IN ALL 4 REGIONS

U.S. WEEKLY JOBLESS CLAIMS DOWN 25,000 TO 303,000

U.S. JOBLESS CLAIMS AT LOWEST LEVEL SINCE APRIL

U.S. 4-WEEK AVG. JOBLESS CLAIMS DOWN 13,500 TO 321,500

U.S. CONTINUING JOBLESS CLAIMS UP 3,000 TO 2.79 MLN

Jane Fox : 11/17/2005 8:30:22 AM

Dateline WSJ The Senate voted 97-2 to approve sweeping pension legislation that would require companies to fully fund their pension plans and would shore up the federal government's pension insurer.

The bill focuses on narrowing the Pension Benefit Guaranty Corp.'s $22.8 billion deficit by requiring most companies to fully fund their pension plans within seven years and increase premiums paid to the federal pension insurer.

The matter now goes to the House, which is expected to pass a similar bill next month. But the White House says it is concerned that Congress's final bill won't put enough pressure on companies to keep their promises to employees, and has threatened a veto.

Jonathan Levinson : 11/17/2005 8:24:13 AM

Ten year notes hold a light loss at the cash open, TNX quoted +.2 bps at 4.486%. IRX is flat at 3.912%.

Jonathan Levinson : 11/17/2005 7:45:18 AM

Equities are up, ES trading 1237.75, NQ 1665.5, YM 10728 and QQQQ +.15 at 40.92. Gold is up 4.10 to 483.10, silver is up .104 to 8.10, ten year notes are down 1/64 to 108 13/16, crude oil is up .30 to 58.175 and natural gas is +.27 to 12.60.

We await the 9:30 release of Initial Claims, est. 322K, Housing Starts and Building Permits, est. 2.06M and 2.17M respectively, then at 9:15, Industrial Production and Capacity Utilization, est. 1% and 79.6% respectively. At noon, it's the Philly Fed, est. 15.

Linda Piazza : 11/17/2005 7:07:45 AM

Good morning. The Nikkei saw another four-year closing high last night. Other Asian markets were mixed, but European markets post strong gains this morning. As of 7:03 EST, gold was higher by $4.40 to $483.50, and crude, higher by $0.07 to $57.96. More details about Asian and European markets follows in succeeding paragraphs.

The Nikkei 225 is unstoppable, it appears, zooming ever higher and achieving new four-year highs almost daily. Last night, it closed higher by 240.92 points or 1.70%, at 14,411.79. The climb in crude and metals sent commodity-related stocks and explorers higher. A lower yen against the dollar sent carmakers higher, with Nissan also benefiting from a restructuring meant to reduce costs. An IPO for silicon wafer manufacturer Sumco Corp. performed well, building enthusiasm for equities. Sanyo Electric Co. did not participate in early gains however, dropping on worries that it would disappoint when releasing earnings. Sony and NEC announced a joint venture for optical-disk drives. Sony declined and NEC rose.

Other Asian markets were mixed. The Taiwan Weighted lost 0.42%, but South Korea's Kospi gained 0.17%. Singapore's Straits Times gained 0.31%, and Hong Kong's Hang Seng climbed 0.94%. Two IPO's on the Hong Kong market, Samson Holding Ltd. and China Infrastructure Machinery Holdings Ltd., were said to have received a lukewarm reception. China's Shanghai Composite eased 0.05% amid new speculation in forex markets that China will soon revalue the yuan. Rumors circulate that China is holding an emergency meeting on the yuan, but there is of course no confirmation of such a meeting. In fact, China has denied that such a meeting is being held.

European markets post gains. In the U.K., October's retail sales rose, meeting expectations, but some components still suggest that consumers remain cautious. The European Commission's quarterly report notes concerns in the short-term period about stronger inflation and weaker growth, but the EC expects growth to accelerate by 2007. That report revised EU12 economic growth prospects downward to 1.3% this year and 1.9% next, with previous forecasts at 1.5% and 2.1%, respectively. Inflation prospects were revised higher, to 2.3% this year and 2.2%, up from the previous 1.9% and 1.5%. The EC sees growth accelerating and inflation moderating in 2007. The EC revised the U.K.'s growth prospects down to 1.6% for this year and 2.3% for 2006, significantly down from the previous 2.8% for both years, and revised inflation higher, to 2.4% and 2.2%, from 1.7% and 2.0%. Print reports and CNBC Europe also carry the EU's Alumnia's concerns expressed today about the need for France and Italy to cut their deficits. Alumnia congratulated Germany's efforts to cut its deficits. Alumnia further warned that EC growth forecasts for the Eurozone could be trimmed further than they have been. These comments and others, saying second-round inflation effects seem contained, lead some to conclude that there might not be a need for a rate hike in the near term. In another release September's Eurozone industrial production disappointed. Some think it's just a pullback from strong August numbers.

In Europe, unlike in Japan, carmakers did not perform well in earliest trading after Renault warned. Oil majors helped boost the markets in earliest trading, but some appear to be easing currently. Swiss insurer Zurich Financial was an upside standout after it reported earnings that beat forecasts, but French Bank Credit Agricole didn't perform as well after its earnings report. M&A activity drew attention.

As of 7:01 EST, the FTSE 100 was higher by 38.40 points or 0.71%, at 5,468.40. The CAC 40 was higher by 27.03 points or 0.60%, at 4,539.16. The DAX was higher by 44.08 points or 0.87%, at 5,125.54. Many of our charts on U.S. indices have been showing megaphone shapes, as Mark Davis has been pointing out, and the DAX's five-day chart has been showing one, too. Today, it broke to the upside out of that shape.

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